Derma Sciences Raises $29 Million in Private Placement Financing
June 20 2011 - 9:34AM
Business Wire
Derma Sciences, Inc. (“Derma Sciences” or “the Company”)
(Nasdaq: DSCI), a medical device and pharmaceutical company focused
on advanced wound care, today announced it has entered into
definitive agreements with select institutional investors to raise
gross proceeds of approximately $29 million. In the offering, the
Company will issue approximately 3.5 million shares of common stock
and five-year warrants to purchase approximately 1.75 million
shares of common stock at an exercise price of $9.90 per share. Net
proceeds from this financing will be used to advance the Company’s
pharmaceutical product DSC127 into Phase 3 trials for the treatment
of diabetic foot ulcers, to hire additional salespeople for the
Company’s advanced wound care products, to repay debt and for
general corporate purposes. The private placement is subject to
standard and customary closing conditions and is expected to close
on or about June 23, 2011.
“A number of well-respected institutions have invested in Derma
Sciences now and we view this as validation of our development
strategy of the past five years. We plan to use these funds to
work with the FDA to advance our drug DSC127 into a Phase 3 trial
we plan to commence during the first half of 2012,” said Edward J.
Quilty, chairman and chief executive officer of Derma Sciences.
“DSC127 has shown great potential in the complete healing of
diabetic foot ulcers in our recently reported Phase 2 trial, with
healing rates exceeding any currently approved products and
above the endpoints of the trial design. We estimate that the
annual sales for a product such as DSC127 could be as much as $900
million worldwide. If approved, we believe this drug will fill an
important unmet clinical need for the nearly 3 million diabetics
with these ulcers globally, who without good treatment results
could face consequences including amputation and death. Our
Advanced Wound Care proprietary dressing business including our
MEDIHONEY®, BIOGUARD® and XTRASORB® brands has been growing in
excess of 50% each year with a relatively small sales force of 20
people. We will add up to 20 new sales representatives during the
balance of 2011 and into 2012 in order to increase our market
penetration and improve the value of these products.”
Oppenheimer & Co. Inc. and Canaccord Genuity Inc. served as
lead placement agents for the offering. Roth Capital Partners and
Rodman & Renshaw served as advisors to the Company.
The securities offered in this financing transaction have not
been registered under the Securities Act of 1933, as amended (the
“Securities Act”), or applicable state securities laws.
Accordingly, the securities may not be offered or sold in the
United States except pursuant to an effective registration
statement or an applicable exemption from the registration
requirements of the Securities Act and such applicable state
securities laws. Pursuant to the terms of a registration rights
agreement entered into with the purchasers, the Company has agreed
to file a registration statement with the Securities and Exchange
Commission registering the resale of the shares of common stock
sold in the offering and issuable upon exercise of the warrants.
Any offering of the Company’s securities under the resale
registration statement referred to above will be made only by means
of a prospectus.
This release does not constitute an offer to sell or the
solicitation of an offer to buy the securities, nor shall there be
any sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of such jurisdiction.
About Derma Sciences, Inc.
Derma Sciences is a medical technology company focused on three
segments of the wound care marketplace, traditional dressings,
advanced wound care dressings, and pharmaceutical wound care
products. Its MEDIHONEY® product is the leading brand of
honey-based dressings for the management of wounds and burns. The
product has been shown to be effective in a variety of indications,
and was the focus of a positive large-scale, randomized controlled
trial involving 108 subjects with leg ulcers. Other novel products
introduced into the $14 billion global wound care market include
XTRASORB® for better management of wound exudate, and BIOGUARD® for
infection prevention. Derma Sciences has successfully completed a
Phase 2 clinical trial in diabetic foot ulcer healing with DSC127,
a novel pharmaceutical drug under development for accelerated wound
healing and scar reduction. For more information please visit
www.dermasciences.com.
Forward-Looking Statements
Statements contained in this news release that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the generality of the foregoing, words
such as "may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate" or "continue" are intended to identify
forward-looking statements. Readers are cautioned that certain
important factors may affect the Company's actual results and could
cause such results to differ materially from any forward-looking
statements that may be made in this news release or that are
otherwise made by or on behalf of the Company. Factors that may
affect the Company's results include, but are not limited to,
product demand, market acceptance, impact of competitive products
and prices, product development, completion of an acquisition,
commercialization or technological difficulties, the success or
failure of negotiations and trade, legal, social and economic
risks. Additional factors that could cause or contribute to
differences between the Company's actual results and
forward-looking statements include but are not limited to, those
discussed in the Company's filings with the U.S. Securities and
Exchange Commission.
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